AW Daily - Tips & Tactics - During the Auction: Making Informed Bids

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Neophyte bidders are arguably the most vulnerable users at any online auction site. They've talked the talk with the high rollers on the message boards, cruised their favorite categories, and now they want to be players, too. Suddenly, they notice a pricey featured auction on a site's front door (not knowing that these spots are typically for sale). Then they enter the frenzy and bid on an item they don't even need--an item that also happens to be totally overpriced. You don't have to make the same mistake. Follow our common-sense suggestions, and you'll prevent unwise bidding on items that eventually will be banished to the closet.

Go Ahead, Lurk
It's OK to lurk. You don't have to start bidding and selling the day you discover eBay or Amazon.com Auctions. In fact, it's a good idea to explore and rate a site before you start buying and selling. Peruse the categories, user feedback pages, message forums, terms of service clauses, FAQs, glossaries, and tutorials. You'll feel a lot more comfortable using the site when you understand its community, procedures, and rules.

Have a Plan
If you feel that you're the compulsive type, it's best not to surf aimlessly at a massive auction site, such as eBay, which has thousands of enticing categories. With more than 2 million items listed, there's bound to be something you think you need and can afford. Before you go in, have a general idea of what you want to research or buy for your collection or sales inventory. You'll make fewer unwanted impulse buys and still be able to keep tabs on the potential hot deals in your favorite categories.

Know the Value
Know the market value of the items you are looking to purchase, or prefigure the maximum amount you are willing to pay for them before you start bidding. Small variations between two related collectibles, such as year, manufacturer, or origin, can dramatically affect their market value. For example, an American Gibson archtop guitar and a Taiwanese Epiphone archtop may look quite similar to someone unfamiliar with guitars, but in a collector's eyes, there's a very real difference--several hundred dollars worth of difference. Knowing the market value of an item prevents blind bidding, which is obviously a bad idea.

A Collector's Eye
On a related note, try to specialize in categories that truly interest you. In other words, just because you tried fly-fishing last summer doesn't mean you need that $1,500 fiberglass rod. Narrowing your focus will help you buy the merchandise you actually want for your collection or feel qualified to resell. Moreover, if you really understand a category's collectibles, you are more likely to spot undervalued items and resell them for a profit. In general, the amount of bidding you do in a specific category should be proportional to your knowledge of its merchandise.

Automated Bidding
Almost every auction site offers some sort of automated bidding system, which will automatically apply your maximum bid for a given item to a running auction. This way you don't have to manually increase your bid every time someone exceeds your most recent bid. It also, in effect, removes the threat of being sniped. If you bid the maximum amount you are comfortable spending, you'll never lose without giving your final offer. If it's a must-have item, make a maximum bid and then monitor the auction on the final day.

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